GM friends.
Has anyone checked in on Uncle Gary? Because he just took another fat L from the U.S. Federal Courts, and I’m concerned.
Pour a double-shot for this one. You’ll need it. This is your mid-week crypto update. ☕️☕️📰
Here’s what’s in today’s issue:
- David & Sam share their thoughts on Grayscale’s big win against the SEC, Vanguard investing heavily in BTC miners, Genesis closing a debt repayment deal, Pepe devs rugging funds, the new crypto tax proposal in the US, Omen backing Bitcoin, Hashdex taking a new angle on a spot BTC ETF & OnlyFans hops on Friend.tech.
- This Week On Chain.
- Rekt Capital has the latest technical analysis for you on the market.
- This week’s trending coins by Rebecca
- Erik has a report for you on whether Friend.tech is a get-rich-quick scheme for influencers or a new breakout use case.
- Defi Dad has a tutorial for you on how to earn with boosted Alienbase LPs on Beefy Exchange.
- Jesse has a ton of hot new airdrops for you.
For any crypto related questions please comment on the website.
U.S. Court Orders SEC to Re-Review Grayscale’s ETF Application
It’s the court decision we’ve all been waiting for.
On Tuesday morning, the D.C. Court of Appeals ordered the SEC to re-review Grayscale’s previously rejected Bitcoin ETF application.
Bitcoin shot up 7% on the news, as the ruling increases the chances of a spot Bitcoin ETF arriving to U.S. shores.
Grayscale manages the world’s largest Bitcoin investment fund, known as the Grayscale Bitcoin Trust (GBTC), which is valued at approximately $16 billion.
Besides Satoshi Nakamoto, Grayscale controls more Bitcoin than any other person or entity, with approximately 643K BTC (3% of 21M) held in trust.
Grayscale’s GBTC operates as a special type of investment trust. Grayscale sells GBTC shares to accredited investors for cash, and then buys and holds Bitcoin with that cash.
So, each issued GBTC represents a portion of Bitcoin held by Grayscale. From there, GBTC eventually filters into the open secondary market for trading.
The problem however is that no investor can redeem their GBTC back to Grayscale for either Bitcoin or cash. Under GBTC’s current structure, there’s no redemption mechanism.
In fact, it appears that Grayscale’s entire business model has hinged on their bet that the SEC would eventually approve a GBTC to ETF conversion! And because GBTC’s value is ultimately determined by the free market, plus the fact that there’s currently no redemption mechanism, GBTC often trades at a significant premium or discount to Bitcoin’s market price.
This isn’t good for Grayscale’s business.
So in October 2021, the company filed an SEC application for a GBTC to spot ETF conversion.
Spot ETF shares are much more likely to trade one-to-one with the underlying asset because there’s a built-in redemption mechanism.
So problem solved, right? Nope.
The SEC denied Grayscale in June 2022, citing concerns of possible market manipulation. So Grayscale sued.
And that brings us to Tuesday.
The Court called BS on the SEC, saying their rejection appeared “arbitrary and capricious” given the agency is approving Bitcoin futures ETFs, while not offering a good reason for rejecting GBTC.
Essentially, the judge said spot and futures…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
